Nigeria’s Debt to World Bank Grows to $17bn

Ndubuisi Francis, Adedayo Akinwale and Sunday Aborisade in Abuja

Nigeria’s indebtedness to the International Development Association (IDA), a member of the World Bank Group (WBG) grew by $600 million in three months, rising from $16.5 billion in June 2024 to $17.1 billion as of September 2024.

This emerged as President Bola Tinubu yesterday requested the National Assembly to approve the sum of $2.209 billion (N1.767 trillion), already provided for in the 2024 Appropriation Act. The N1.767 trillion loan was captured in the external borrowing plan for the implementation of the N28.7 trillion 2024 budget. Tinubu made the request in separate letters read on the floors of the Senate and House of Representatives during plenary.

The IDA provides concessional loans  and grants to governments of the poorest countries, and complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD).

Based on its financial statement for the fiscal year leading up to September 30, 2024, Nigeria’s debt to the IDA increased by $600 million between June 2024 and September 2024 (a period of three months), from $16.5 billion to $17.1 billion.
This put Nigeria as the third largest debtor to the IDA.

Year-on-year, Nigeria’s exposure to the IDA posted a 14.4 per cent growth from $14.3 billion in June 2923 to June 2024.
Data from the external debt stock of the Debt Management Office (DMO) as of March 31, 2024 indicated that Nigeria was indebted to the World Bank to the tune of $15.59 billion.

At the current $17.1 billion stock, Nigeria is the third largest creditor to the IDA, trailing behind Bangladesh and Pakistan which owe $21 billion and $18.5 billion, respectively.

The new financial statement indicates that the ten top debtor nations account for 63 per cent of IDA’s total exposure.
India ranks fourth, with a debt at $15.9 billion, while Ethiopia stands at $13.1 billion.

Other leading borrowers among the top ten IDA debtors in the world are Kenya with a $12.4 billion debt burden, Tanzania ($12.2 billion), and Vietnam ($12.2 billion).

Ghana and Uganda are at the bottom of the ladder with Ghana and Uganda owing $7 billion and $5 billion, respectively.
According to the latest financials, in 2024, the World Bank Group has so far provided much-needed financing, conducted research and analysis, and partnered with governments, the private sector, and other institutions to address global development challenges.

The report stated that the World Bank Group delivered a record $42.6 billion in climate finance in fiscal year 2024, supporting efforts to end poverty on a livable planet, investing in cleaner energy, more resilient communities, and stronger economies.
This translates to a 10 percent increase in climate financing compared to the previous year 2023

According to WBG, it has committed to devote 45 percent of annual financing to climate action by 2025, deployed equally between mitigation and adaptation.

It provided $117.5 billion in loans, grants, equity investments, and guarantees to partner countries and private businesses.
The total includes multi-regional and global operations, the Bank stated, adding that regional total reflected the International Finance Corporation’s ( IFC’s) commitments that were recalculated to match the World Bank’s regional classifications by aggregating country-level commitments within each World Bank region.

Africa got $38 billion, $12.5 billion went to East Asia and Pacific, $24.7 billion to Europe and Central Asia, $19.4 billion to Latin America and the Caribbean,  $6.5 billion to Middle East and North Africa, and $15.9 billion to South Asia while $0.4 billion was  globally disbursed.

 Tinubu Writes N’Assembly, Seeks Approval for N1.7tn External Loan

President Bola Tinubu yesterday requested the National Assembly to approve the sum of $2.209 billion (N1.767 trillion), already provided for in the 2024 Appropriation Act.

Tinubu made the request in separate letters read on the floors of the Senate and House of Representatives during plenary.
Tinubu, said if approved, the loan would be used to part-finance the budget deficit of N9.7 trillion for the 2024 budget.
On the floor of the House, the Speaker, Hon. Tajudeen Abbas read the letters.

At the Senate, after reading the letter, Akpabio mandated the Senate Committee on Local and Foreign Debts to work on the request and report back within 24 hours

“The Presidential request for $2.2 billion, equivalent of N1.767 trillion loan is already enshrined in the external borrowing plan for the 2024 fiscal year .

“The Senate Committee on Local and Foreign Debts  should therefore give the request expeditious consideration and report back within 24 hours.”

The president also forwarded the Medium Term Expenditure Frame work  ( MTEF) and Fiscal Strategy Paper (FSP) for  2025- 2027 to both the Senate  and the House of Representatives.

Akpabio, after reading the letter, mandated the Senate Committee on Finance, National Planning and Economic Affairs to consider it at the committee level and report back in one week.

Key parameters in the 2025 – 2027 MTEF / FSP  documents needed for consideration and approval of the proposed N47.9 trillion 2025 budget included $75  oil price benchmark per barrel; daily oil production of 2.06 million barrels; exchange rate of  N1,400/$1 and targeted GDP Growth rate of  6.4 per cent.

Tinubu in another letter to both chambers of the National Assembly, sought approval for the Social Investment Programme Amendment Bill
The proposed amendment aims to strengthen the framework for implementing the government’s social welfare programmes, ensuring greater transparency and efficiency.

He explained further that the amendment seeks to designate the National Investment Register as the primary tool for targeting beneficiaries of social investment initiatives.

This measure, he said, would ensure that welfare programmes are data-driven and deliver effective social protection to Nigeria’s most vulnerable citizens.

“The amendment will make our social and welfare programmes more transparent, efficient, and impactful in addressing the needs of vulnerable Nigerians,” he said
He further noted that the request was made in accordance with Section 58(2) of the 1999 Constitution (as amended) and urged the Senate to give the bill urgent consideration.

The proposed amendment, if passed, will improve the management and delivery of social investment programmes, enhancing their capacity to combat poverty and inequality across the country.

The Senate has referred the bill to relevant committees for review and is expected to deliberate on the proposal in subsequent sessions.

This development indicates that the Tinubu’s administration is commited to leveraging technology and data to optimise the impact of its social welfare initiatives.